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I need help with this question, I almost solved but it still gives me a RED X on the Tax part, please help me with
I need help with this question, I almost solved but it still gives me a RED X on the Tax part, please help me with that.
Table 12-12 Depreciation percentages (expressed in decimals) 3-Year 7-Year 10-Year 15-Year Depreciation Year 5-Year MACRS 20-Year MACRS MACRS MACRS MACRS MACRS 1 0.333 0.200 0.143 0.100 0.050 0.038 2 0.445 0.320 0.245 0.180 0.095 0.072 3 0.148 0.192 0.175 0.144 0.086 0.067 4 ............. 0.074 0.115 0.125 0.115 0.077 0.062 5 0.115 0.089 0.092 0.069 0.057 6 0.058 0.089 0.074 0.062 0.053 7 0.089 0.066 0.059 0.045 8 0.045 0.066 0.059 0.045 . 9 0.065 0.059 0.045 10 0.065 0.059 0.045 11 0.033 0.059 0.045 12 0.059 0.045 13 0.059 0.045 14 0.059 0.045 15 0.059 0.045 16 0.030 0.045 17 0.045 18 0.045 19 0.045 20 0.045 21 0.017 1.000 1.000 1.000 1.000 1.000 1.000 Telstar Communications is going to purchase an asset for $360,000 that will produce $170,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12 12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 25 percent tax bracket. Fill in the schedule below for the next four years. X Answer is complete but not entirely correct. Year 1 Year 2 Year 3 Year 4 $ 170,000 $ 170,000 $ 170,000 $ 170,000 $ $ $ Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow 26,640 143,360 83,340 x 119,880 50,120 $ 60,000x (9,880) 119,880 110,000 160,200 9,800 49,950 (40,150) 160,200 120,050 53,280 116,720 76,680 x 40,040 53,280 93,320 $ $ $ $ $ 60,020 26,640 86,660 $ $Step by Step Solution
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